Gender Equality and Inclusive Growth
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund
  • | 2 https://isni.org/isni/0000000404811396, International Monetary Fund

Contributor Notes

This paper considers various dimensions and sources of gender inequality and presents policies and best practices to address these. With women accounting for fifty percent of the global population, inclusive growth can only be achieved if it promotes gender equality. Despite recent progress, gender gaps remain across all stages of life, including before birth, and negatively impact health, education, and economic outcomes for women. The roadmap to gender equality has to rely on legal framework reforms, policies to promote equal access, and efforts to tackle entrenched social norms. These need to be set in the context of arising new trends such as digitalization, climate change, as well as shocks such as pandemics.

Abstract

This paper considers various dimensions and sources of gender inequality and presents policies and best practices to address these. With women accounting for fifty percent of the global population, inclusive growth can only be achieved if it promotes gender equality. Despite recent progress, gender gaps remain across all stages of life, including before birth, and negatively impact health, education, and economic outcomes for women. The roadmap to gender equality has to rely on legal framework reforms, policies to promote equal access, and efforts to tackle entrenched social norms. These need to be set in the context of arising new trends such as digitalization, climate change, as well as shocks such as pandemics.

I. Introduction

This working paper is the extended version of a chapter in the forthcoming book: How to Achieve Inclusive Growth. 2 It is based on the premise that inclusive growth cannot be achieved without a clear focus on gender equality, given that women constitute 50 percent of the world’s population. The purpose of the paper is to offer interested readers, practitioners, and policy makers entry points to the analysis of gender gaps and related policy discussions. It seeks to provide references and tools to support policy makers in developing effective responses that take into consideration the specific circumstances of a country, such as its level of economic development, history, as well as cultural and social norms. The paper is organized into three main parts. Following this short introduction, Section II provides an overview of key drivers of gender inequality and shows how these are linked to other intersectional characteristics, as well as ultimately, to growth. Section III outlines the different dimensions of gender inequality and resulting gender gaps. Section IV presents policy approaches across a range of key areas as well as specific examples and short case studies of effective models. Section V provides a set of suggestions for future research into gender inequality and policy response, before Section VI draws together the main messages of the paper and overall conclusions.

II. Gender Gaps Persist: Why Achieving Equality Matters for inclusive growth

Countries around the globe have made considerable progress in narrowing or sometimes closing gender gaps in certain areas of life. Female labor force participation and employment have increased and the wage gap relative to men has narrowed across all countries (Figure 1). This important change reflects many factors, including achievements in education and a growing proportion of women who join and stay in the labor market, while combining their work with raising children. However, despite some progress, no country has been able to achieve gender parity in all aspects of life. This inequality can be an obstacle for governments in their efforts to achieve inclusive growth due to the implications of gender disparities for economic growth and income inequality.3

Figure 1.
Figure 1.

UNDP Gender Inequality Index4

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: UNDP, authors’ calculations.Note: Average by region, with a higher value corresponding to higher gender inequality.

In order to analyze gender gaps and understand their implications for growth, defining gender equality can create a helpful reference framework for policymakers. The World Health Organization (WHO) describes gender as “the socially constructed roles, behaviors, activities, and attributes that a given society considers appropriate for men and women.” On the other hand, sex denotes characteristics that are determined biologically. In its 2012 World Development Report on gender equality and its role for development, the World Bank suggests three key dimensions of gender equality: the accumulation of endowments (education, health, and physical assets); the use of those endowments to take up economic opportunities and generate incomes; and the application of those endowments to take actions affecting individual and household well-being.5

Gender and Economic Growth

There is a growing body of literature suggesting that gender equality—in addition to being a moral imperative—has important implications for economic growth. For example, there is a positive association between gender equality and per capita GDP. Gender inequality in economic participation restricts the pool of talent in the labor market and can thus lead to a less efficient allocation of resources and, hence, lower GDP growth.6 Gender equality and women’s empowerment matter for economic development, too.7 Higher efficiency and productivity contributing to economic growth result in better development outcomes. Furthermore, improving women’s absolute and relative ecoonomic and social status can help achieve better development outcomes for their children.8

Whilst the benefits of gender equality are increasingly clear, so are the detrimental impacts of persising inequality. Estimates by Cuberes and Teignier (2016) suggest long-run income loss from the underused economic potential of women that range between 10 percent in Europe and Central Asia to 38 percent in the Middle East and North Africa.9 According to the Organization for Economic Cooperation and Development (OECD), greater educational attainment, especially due to higher levels of education among girls, accounted for about half of the economic growth in OECD countries over the past 50 years.10 Furthermore, higher labor force participation among women in Nordic countries explains 10–20 percent of the annual average growth in GDP per capita over the past 40–50 years.11

Closing gender gaps can have a favorable impact on other factors conducive to higher and more sustainable economic growth too, such as macroeconomic and financial stability and economic diversification. For example, the decline in the working-age population and output in aging societies could be mitigated by policies encouraging women to remain, re-enter, and engage more actively in the workforce. In Japan, estimates suggest that raising the labor force participation among women to the level of the other G7 countries (excluding Italy) would permanently increase GDP per capita by around 4 percent compared to no policy change.12 Another example shows that gender inequality is strongly and negatively associated with export diversification in low-income and developing countries as it can limit the level of human capital and thereby leads to an inefficient resource allocation.13 Finally, some studies suggest that a higher representation of women in banking leadership roles may be associated with greater financial stability, which could be explained by more diversity in executive positions, among other factors.14

Gender, income inequality and inequality of opportunity

The level of gender equality has wider implications for how incomes are distributed within a society. A number of studies also look at the relationship between income inequality and economic growth, and some suggest that a less equal income distribution undermines growth.15

Inequality of opportunity describes the share of income inequality that can be attributed to circumstances that are outside of a person’s direct control. These can include but are not limited to gender, place of birth, and levels of parental education. According to EBRD, in countries of Eastern Europe, Central Asia, and the Caucasus region, 20 to 50 percent of income inequality is due to circumstances at birth. Gender explains between a quarter and half of the income inequality in these countries.16

The gender earnings gap directly adds to income inequality, while unequal access to education, health services, and financial resources, as well as legal barriers, may result in unequal chances in accessing better jobs and opportunities over the life cycle.

Gender inequality and poverty

Gender disparities result in a greater vulnerability of women to poverty.17 Women everywhere perform more unpaid work than men, and children and dependents are an important factor in defining their working arrangements, especially during their reproductive years.18 The majority of single parents are women, and data suggests that single parenthood increases the risks of poverty compared to other family types.19 Even in wealthy households, the lack of an own income and economic independence may affect not only the current well-being of women but also their lifetime earnings, including limited access to social security and pension entitlements later in life.20 Single mothers and migrant women as well as older women living alone are more vulnerable to poverty than men in similar types of households. According to the 2015 UN report, in Europe, 64 percent of the elderly poor were women.21 This risk of poverty can also pass from parents to children. A study on the causes of female poverty suggests that poor children are more likely to live in single or migrant mother families.22 Therefore, fighting gender inequalities in labor market outcomes and opportunities has a direct impact on poverty through generations.

Finally, women tend to be more vulnerable to the effects of climate change as they are often poorer, less well educated, and do not participate equally in decision-making related to climate change policies and measures.23 It is also harder for them to access opportunities within the emerging green sector as they find it harder to gain the necessary skills needed to access new types of jobs, or to build their capacity as entrepreneurs to adopt green technologies and tap into finance to start or grow their businesses in the green economy.24

III. Understanding the Reasons Behind Gender Gaps

Gender gaps persist across a wide range of areas, from health, education, entrepreneurship and labor markets to representation in managerial positions, political decision making and policy formulation.

There are various indices that measure gender gaps.25 Among them is the World Economic Forum’s (WEF) Global Gender Gap Index that focuses on four key areas: (i) economic participation and opportunity, (ii) educational attainment, (iii) health and survival, and (iv) political empowerment.26 Women have achieved 68 percent parity with men across the globe, according to this index calculated in the 2020 report. In other words, the global gender gap stands at 32 percent. On average, the gender gaps are the smallest in the areas of health and survival as well as educational attainment, however, there is variation across regions and countries. In education, gaps are virtually closed across almost all regions except for Sub-Saharan Africa, while gender gaps in health persist across countries in East Asia and Pacific and MENA (although in East Asia this tends to reflect a larger gap in China). Gender gaps in economic opportunity and political empowerment remain substantial across the world though.

Gender gaps in labor market participation

Disparities in labor market participation contribute to gender gaps in economic outcomes. They translate into wage and earnings gaps, as well as the underrepresentation of women in senior and managerial positions. According to the WEF 2020 Global Gender Gap, gaps in this area remain large across all parts of the world, especially South Asia and MENA, where they stand at around 60 percent. North America, as well as Eastern and Western Europe are the regions that are closest to parity in economic participation, with gaps between 22 and 31 percent. If analyzed by income level, countries in the lower middle-income group have the largest gaps in economic participation, while gaps in low-income countries are close to those in high and upper middle-income countries. Figure 2 shows the labor force participation rate for women and men across regions, with the world average for women at around 48 percent and for men at around 75 percent.

Figure 2.
Figure 2.

Labor Force Participation Rate (in percent)

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: The World Bank: World Development Indicators: International Labour Organization, ILOSTAT database, authors’ calculations.Note: Labor force participation rate (% of population ages 15+) (modeled ILO estimate). Population-weighted averages, except for the world average, 2019.

There is considerable variation in women’s participation in labor markets within regions and at different income levels. For example, in Nepal, the participation rate of women in the labor market stands at over 80 percent, while it is only around 26 percent in South Asia, which is the second-lowest level in the world. This may be explained by both higher poverty rates and less restrictive social norms in Nepal. On the other hand, in Pakistan, which is also a lower middle-income country in South Asia, female labor force participation stands at 24 percent, which is below the regional average.

The analysis of the evolution of women’s labor force participation reveals the role of access to modern contraception as an important factor in changing women’s economic status. According to Goldin (2006), women were able to plan their careers with the introduction of the contraceptive “pill” in the U.S. They started to place a greater emphasis on their professional success and saw, starting in the sixties, the largest increase in their earnings relative to men, as well as a shift in the occupations they chose.27 In a different study, Goldin and Katz (2002), discuss that the contraceptive “pill” has had an important impact on young women’s career and marriage decisions in the 1970s in the US28, enabling them to tie the knot later and invest more in their professional careers.

Increased access to preferred contraception methods may bring significant health and other benefits to women, beyond being a basic human right. The use of contraception helps reduce health risks related to pregnancy, especially for adolescent girls, and decreases infant mortality rates.29 A recent study demonstrates that women are more likely to have their demand for modern contraceptives methods satisfied in countries that achieved more gender equality and improved women’s educational opportunities.30 Despite some progress being made, the WHO assesses that among the 1.1 billion women in need of family planning, there are still 270 million who have an unmet need for contraception.31

The lower participation of women in economic life and related gender inequality of outcomes start with unequal access to opportunities. Lower education attainment, lack of access to appropriate health services and other public services and infrastructure, legal barriers as well as social norms restrict the participation of women in economic activities.

Gender gaps in education

Even though girls and women have caught up with boys and men in relation to educational attainment, women remain underrepresented in science, technology, engineering, and mathematics (STEM) fields, with persistent gaps in mathematics and numeracy.32 Since jobs requiring STEM skills tend to be in higher paid and fast-growing sectors such as computer science and engineering, this lag contributes to the continuing gender pay gap. The global average share of women among STEM graduates from tertiary education was around 35 percent in 2016. Interestingly, more gender-equal countries had some of the largest gaps in STEM in secondary and tertiary education. Stoet and Geary (2018) call this an “educational-gender-equality paradox”.33 For example, in Finland that occupies third place in the WEF Gender Gap ranking, the share of female graduates from tertiary education in STEM was below 30 percent in 2016. In Oman, a country in 144th place, that share was 53 percent.34 Suggested contributory factors behind such educational choices include entrenched stereotypes about which careers are regarded as more suitable for either men or women. These choices can have long-term consequences for the economic outcomes of women.

Gender gaps in health

Gender gaps in health persist across all regions of the world, but the underlying reasons for the gaps as well as the age profiles of the women and girls affected vary. China, India, and Sub-Saharan Africa account for 87 percent of the world’s missing girls and excess female mortality.35 The phenomenon of missing or unborn girls measured as male-to-female sex ratios at birth is one of the results of sex-selective abortions due to son preference in some regions of the world. The WHO assesses that the average global natural sex ratio at birth at around 105 (or 105 males for every 100 females).36 In China, this ratio is at 112.6, in India at 110.37 Furthermore, poor access to or lack of basic public infrastructures for potable water and sanitation disproportionately affects women and girls as they tend to be responsible for managing household water supply, sanitation, and overall famiy health.38 Another reason for the gender gaps in health is the excess mortality of women during their reproductive years, reflecting high levels of maternal mortality and health issues due to pregnancy or childbirth. In Sub-Saharan Africa, excess female mortality in the reproductive years accounts for 78 percent of overall excess female mortality in the HIV/AIDS countries. This is the only region in the world where relative mortality risks have increased for women. Finally, another result of entrenched gender inequality is child marriages that affect girls disproportionately: the prevalence of child marriage among girls is five times higher than for boys.39

Life expectancy at birth is higher for women than it is for men, however, and globally female survival to age 65 rate exceeds that for men. This difference is partly due to biological factors but also reflects behavioral differences between men and women. However, according to the WHO40, this inherent advantge of women is overridden by gender-based discrimination in some regions of the world (notably parts of Asia), reducing female life expectancy at birth to levels equal to or below those of men. Furthermore, low female life expectacy can also be linked to HIV/AIDS.

The link between gender gaps in health and inclusive growth is clear. Healthy lives and well-being of both men and women is an essential component for achieving growth and sustainable development (SDG3).41 Biological factors and social norms affect the health status of women and men differently. Certain diseases affect exclusively men (prostate cancer) or women (cervical cancer). Women are less likely to engage in risky health behavior but make up the majority of victims of sexual abuse and domestic violence. Men are more likely to be victims of traffic accidents. All these facts are key to understanding the role of gender in health outcomes. There is also a disproportional representation of women among health workers. Globally, 70 percent of workers in this sector are women. In the EU this share is even higher—at 78 percent.42,43 That, and the fact that women are more likely to care for sick family members, may expose them to a heightened risk of exposure during outbreaks of certain infectious epidemic-prone diseases (e.g. Ebola, etc.)44,45 Pregnant women may be especially vulnerable.

A study by the WHO suggests that various infectious diseases may affect men and women differently, but further data is being collectd and analyses undertaken to better understand the role of sex in determining transmission and mortality rates.46

Violence against women

Violence against women (VAW) can take many forms, including sexual harassment and assault, child marriage, female genital mutilation, forced sterilizations and the trafficking in women and girls. According to the World Health Organisation, intimate partner violence, however, is still the most common form of VAW, with about 35% of women globally having experienced physical and/or sexual violence in their lifetime by an intimate partner47. VAW is a violation of a woman’s rights to life, health, liberty and security, among others. Domestic violence, in particular, predominantly affect women across the world.48 It can take the form of physical, sexual, verbal, or emotional abuse, reproductive coercion, as well as digital or financial abuse. It has a devastating impact omn womens’ physical and mental health, leading to repercussions on their performance in the workforce and on firm productivity49. A recent survey50 by the US Institute for Women’s Policy Research showed that the average financial cost for survivors of domestic violence is over $100,000 for medical and legal expenses—and four times higher for women than for men. Other consequences include interruptions in education, difficulties in obtaining a job (in about 80 percent of the cases) or the loss of a job (fifty percent of the cases). Most survivors had money “taken” by their partners, which translated into unpaid bills, poor credit scores, and the inability to create financial security.

In addition, women are found more likely to own firms in economies where workplace sexual harassment laws exist51. The enforcement of legislation aimed at protecting women from domestic violence and sexual harassment is associated with areduction in gender inequality and discrimination in the labor market52. Despite this important link, 45 economies still do not have legislation on domestic violence. Moreover, out of the 155 economies that do have these provisions in place, only 101 strictly adhere to international good practices by defining domestic violence as physical, psychological, sexual and economic abuse53.

Legal barriers and social norms

Legal barriers and social norms create further barriers for women to access economic opportunities in the same way as men do. According to the World Bank “Women, Business and the Law” survey, countries in the MENA region and South Asia with the lowest economic participation of women relative to men also have the most restrictive laws and social norms towards women.54 The OECD’s Social Institutions and Gender Index (SIGI) confirms that restrictive social institutions, as well as legal restrictions and prevailing conservative attitudes and practices contribute to more discriminatory environments for women and girls.55 In low and middle-income countries, high costs of education, unpaid care work, or young-age marriages deprive girls of higher educational attainment.

Stereotypes and Implicit gender bias

Prevailing social norms, culture, values, and past experiences form stereotypes and activate implicit, or unconscious, biases against women. Unconscious gender bias is an unintentional (automatic) mental association that leads to a quick assessment of an individual according to their gender. Stereotypes influence expectations about acceptable behavior of women and men. Unconscious bias can impede women’s advancements in their professional careers.56 The UNDP Gender Social Norm Index57 estimates that 91 percent of men and 86 percent of women in 75 countries covered by the survey, demonstrate at least one bias against gender equality in areas such as politics, economic, education, intimate partner violence, and women’s reproductive rights. The UNDP further reports that about 50 percent of men and women who participated in the survey say that “they think that men make better political leaders than women.” The International Labor Organization’s (ILO) “Women in Business and Management” report finds that gender stereotypes are among the top three barriers to women’s leadership together with unpaid care responsibilities and male-dominated corporate cultures.58

Aspirations and expectations

In addition, women’s labor force participation and fertility are influenced by their own aspirations and expectations and the resulting self selection out of certain educational and career options and into others. As shown by Fernández and Fogli (2009), married women born in the same country (the US) have different degrees of participation in the labor market according to the beliefs that were once prevalent in their parents’ country of ancestry, even after controlling for the city in which these women reside, their age and education, and their husband’s age, education, and income. This shows how neither formal institutions nor underlying economic conditions are sufficient to explain the variation in women’s work and fertility choices and the importance of culture (here transmitted by their parents).

Financial inclusion

Worldwide, only 37 percent of women have a formal bank account, compared with 46 percent of men, and the difference is persistent across all income groups in developing countries.59 These gender gaps affect, in particular, entrepreneurship as they restrict women’s access to finance and wider economic opportunities.60 Indeed, studies on banking and entrepreneurship highlight disproportionate barriers for women entrepreneurs to obtain start up assistance, entrepreneurship training, angel and venture capital investments and loans to further expand and grow their businesses.

Types of employment

Data on labor force participation may disguise important differences between the type and quality of work performed by men and women as well as their working arrangements. On average, men are more likely to be employed in the production of goods and construction, while women tend to work in social and personal service sectors. Women are more likely to work part-time, or in precarious employment, with less job security, and at a greater risk of extremely low pay. According to the ILO, women are significantly more likely to be in vulnerable employment in developing countries, such as in informal work arrangements.61 This is the case even in regions where overall female labour force participation is high and comparable to that of advanced economies (e.g. in Sub Saharan Africa). Furthermore, even in developed countries, shocks such as the pandemic have shown that women suffer significantly larger job losses than men as a result of working in the service sector and the closing of schools and day care centers62.

Technological change and future of work

Digitalization and changes in the future of work are likely to create further challenges for gender equality. Women tend to perform more repetitive and less analytical tasks even when both women and men hold similar positions in similar occupations.63 In health and public administration – sectors where women are relatively overrepresented, and where jobs are at a lower risk of being automated – women are more likely to perform more routine tasks and thus face a higher risk of job displacement compared to men. Women are also underrepresented in shaping the design and application of new technologies, including artificial intelligence, and thereby are at risk of being left behind in the race to take advantage of the associated opportunities. For example, recruitment ads based on algorithms are perpetuating the gender pay gap by targeting listings for better-paid jobs toward men.

Unpaid work

Women do more than two additional hours of unpaid work per day on average than men. In some countries, this difference is even larger. The ILO finds that women perform 76.2 percent of total hours of unpaid care work globally, more than three times as much as men.64 In Asia and the Pacific, this rises to 80 percent. According to Ferrant et al. (2014), women around the world spend two to tenfold more time than men in unpaid care work. Unpaid work includes tasks such as caring for children, the elderly, and routine housework, and shopping. 65 Unpaid care work leaves less time for girls and women for education, formal labor market participation and restricts their paid work prospects, leads to gender gaps in political participation, reduces women’s bargaining power, and contributes to gender income gap. Unpaid caregiving can also lead women to engage more in low-paid or informal work to allow them to balance between unpaid care responsibilities and paid employment. Some studies suggest that policies to reduce and redistribute unpaid work across genders will bring gains that could amount to up to 4 percent of GDP.66 Such gains can be achieved due to exploiting more fully the potential of women as they will join more productive sectors in the economy.

Political empowerment

Globally, women lag far behind men in relation to political empowerment. The closest to parity – at around 37 percent – are countries in Western Europe and South Asia, while the largest gaps persist in Central Asia and MENA regions. Political empowerment reflects the representation of women in political roles and among heads of states. As a general outcome, this may reflect the limiting factors discussed earlier, including prevailing social norms and individual biases.

Gender gaps across a woman’s life cycle

The differentiation of gender gaps across different life stages of women is an important factor to shape policy solutions.67 At the early stages of life, educational enrolment and a focus on encouraging girls into STEM programs should be considered in order to provide equal opportunities for girls and boys. Adulthood and, in particular, the start of parenthood represent the stages when gender gaps are widening, especially in relation to economic participation rates. During the reproductive years, the labor force participation of women declines, reflecting a substantial and continuing motherhood penalty. In Japan and Korea, the age-employment profile of women exhibits an M-shaped line, showing a drop in labor force participation during the time when women have children (Figure 3). This is however an important stage in women’s professional lives and can have a long-term impact on their careers and earnings. The estimates of a long-run “child penalty”, or the effect of parenthood on a drop in earnings, show a penalty of around 21–26 percent for mothers in Scandinavian countries, and up to 51–61 percent in Austria and Germany Earnings of fathers in all these countries remain virtually unchanged.68

Figure 3.
Figure 3.

Age-employment profiles for women, (in percent)

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: International Labor Organization. “Employment by sex and age — ILO modelled estimates.” ILOSTAT. Accessed 14–02-2020. https://ilostat.ilo.org/data.Note: Estimates for 2019.

Gender gap in pensions

In combination, the inequalities that women face over the course of their lives contribute towards a substantial gender gap in pensions. Interrupted careers and early withdrawal from the labor force result in lower lifetime earnings and a larger gender pension gap. Women live longer but are less likely to have a pension: ten percent more men receive a pension than women.69 When women do receive a pension, it is likely to be smaller than that of men. According to EIGE, the gender gap in pensions was larger than gender pay gaps and stood at around 37 percent across EU member states in 2018. The pensions gap was similar or above 40 percent across six EU countries and below 10 percent in only three member states.70 Estimating the gender pension gap for emerging market economies and developing countries is not always possible due to a lack of data. UNDP discusses that only six out of 41 countries with low Human Development Index rankings report pension data. In these countries, 17 percent of men and 11 percent of women have access to pensions, and women would typically receive a smaller pension compared to men.71 In some countries, neither men nor women receive a pension. Since women tend to accumulate fewer savings than men over their lifetimes, they are more vulnerable to poverty in their retirement.72

Gender data gap

A key challenge for advances in gender equality is the availability of gender-relevant data. More efforts are needed to improve the availability of sex-disaggregated data. Governments and companies may face challenges in assessing the needs and the impact of policies on men and women. These policies may range from macroeconomic measures, infrastructure planning (e.g. urban transport) to finance, health and safety. Moreover, the lack of women in leadership may also affect decisions taken by governments and enterprises. Women’s perspectives and needs matter. Perez (2019) explores sex-disaggregated data gaps and biases, and how they critically affect women and the potential of their advancement.73 In general, macroeconomic policy experience shows that quality-driven comprehensive data collection leads to analytical and policy-making payoffs that more than compensate for the cost. The same conclusions can be extended to the collection of sex-disaggregated data. The World Bank is spearheading the effort with its Gender Data Portal (http://datatopics.worldbank.org/gender/), a comprehensive source for the latest sex-disaggregated data and gender statistics covering demography, education, health, labor participation, economic opportunities, public life and decision-making, and agency. Data2X is another gender data resource platform established by UN agencies, governments, civil society, academics, and the private sector.

OXFAM (2019) calls for a sex-disaggregated collection of agricultural data in the context of fighting extreme poverty conditions among small farmers. Among advanced economies, Korea is regarded as a champion in gender statistics. These achievements took time to develop; as detailed in Jeon (2008) the process is lengthy and requires a precise sequence of steps and consistent political determination.

The Alliance for Financial Inclusion (AFI) is working with Central Banks in emerging economies to gain their commitment to collect sex-disaggregated data in order to inform policies to enhance financial inclusion and access to business finance for women. The EBRD is partnering with AFI and Central Banks across a range of countries. This wealth of data will inform governments in their effective design of fiscal policies and structural reforms including the amendment of the legal framework.

Better gender data enhancing financial inclusion of women in Egypt

The Central Bank of Egypt (CBE) has brought the promotion and coordination of a gender-inclusive financial system that addresses the specific needs of women to the forefront of its policy agenda. This included guidelines to banks to collect and report gender-disaggregated data with the aim of tracking the progress of women’s financial inclusion and mapping the demand-side and supply-side data that cover both households and MSMEs.

Together with the Alliance for Financial Inclusion (AFI) and Data2X, a gender data platform, the CBE is building a national sex-disaggregated supply-side data collection framework. This creates a comprehensive overview of women’s access to and use of financial services and contributes to a scalable model for collecting, using, and disseminating national supply-side sex-disaggregated data.

In addition, the CBE strengthened financial consumer protection regulations, enhanced awareness of and access to financial literacy programmes through the Egyptian Banking Institute (EBI), the CBE’s training arm, and invested in enhanced digital financial infrastructure to capitalise on increasing mobile phone ownership rates, including amongst women. For example, gender data reported by Egyptian Financial Regulatory Authority showed a significant gender gap in mobile payment users, and hence a need to raise awareness amongst women in this area. In response, CBE is encouraging increased mobile wallet use by changing regulations and allowing banks to digitise savings wallets

At a wider regional and international level, the CBE is co-leading AFI’s Financial Inclusion Data (FID) Working Group. The aim of the group is to develop a common framework among its members for measuring financial inclusion and sharing lessons learned regarding target setting, survey methodology, analysis and the usage of data to inform policymaking. It analyses data and indicator definitions, develops adequate data collection methodologies, advises on objective policy targeting, and guides data analysis to enable evidence-based financial inclusion policymaking and regulation. 74

Resources:

Data2X is a collaborative technical and advocacy platform, working through partnerships to improve the availability, quality, and use of gender data to make a practical difference in the lives of women and girls worldwide.

https://data2x.org/resource-center/

https://data2x.org/what-we-do/we-strengthen-the-production-and-use-of-gender-data/we-partner-with-data-producers-to-improve-established-data-systems/womens-financial-inclusion-data/

The IMF’s Financial Access Survey (FAS) has begun asking countries for sex-disaggregated supply-side data (27 countries reported this data in the 2017 FAS) and is stepping up its outreach to accelerate progress.

https://data.imf.org/?sk=E5DCAB7E-A5CA-4892-A6EA-598B5463A34C

Multilateral Development Banks work on financing women-led firms and collecting supply-side sex-disaggregated bank data through the G20 sponsored Women’s Entrepreneurship Finance Initiative. https://we-fi.org/

The Alliance for Financial Inclusion (AFI) is the world’s leading organization on financial inclusion policy and regulation. A member-owned network, it promotes and develops evidence-based policy solutions that improve the lives of the poor through the power of financial inclusion

https://www.afi-global.org/sites/default/files/publications/2019–04/AFI_Egypt%20gender_AW_digital.pdf

https://www.unece.org/stats/gender/toolkit.html

IV. Policies to Close Gender Gaps

This part discusses a range of policy proposals designed to reduce or eliminate gender gaps. The ethical motivation is clear, and the evidence, discussed above, of the economic incentives involved, should accelerate the process not only in advanced economies, but also in emerging markets, developing countries, and fragile states. Indeed, the literature has identified specific policy recommendations for each of these groups of countries. Case studies include Holmes et al. (2014) for fragile states, Stotsky et al. (2016) for sub-Saharan Africa, Chakraborty (2016) for Asia, IMF (2017) for G7 countries, and OECD (2017) for OECD members and a few non-OECD countries.

What tools are employed to address the gender gap in its many dimensions? In large part, the solution cannot abstract from a cultural revolution that will enfranchise women from their traditional roles as mothers and caregivers and will at the same time extol those qualities in men. There are, however, many instruments that will help in that transition. The first section reviews fiscal policies starting from gender-sensitive Public Financial Management practices, then addresses taxes and finally expenditures. The second one is devoted to more general structural reforms. It focuses on reforms of the legal framework to protect the safety of women at home and their rights to education. It stresses the need to abolish discriminatory laws in terms of inheritance, to foster access to jobs and careers, and to promote financial inclusion for women.

3.1. Fiscal policy

Gender Budgeting and Public Financial Management (PFM) Reforms

Stotsky (2016) defines gender budgeting as “an approach to budgeting that uses fiscal policy and administration to promote gender equality and girls’ and women’s development.” Not just explicit measures (i.e. taxes or specific expenditures), but also procedures in the budget cycle affect the gender gap and can be designed to address and help correct existing biases.

Historically, gender budgeting ideas emerged in Australia in the 1980s and spread to Canada, South Africa, and the UK in the 1990s. As of today, among advanced economies, Austria mandates gender budgeting in its constitution, but the same is true for some emerging markets or developing economies like Bolivia and Rwanda. Belgium (and 20 IMF member countries in total) incorporate the mandate in the organic budget or other finance laws. Stotsky (2016) combines the results of 6 regional surveys to find that 19 out of 23 high performers (in terms of low gender inequality) have introduced legal mandates for gender budgeting. This fact seems to support the view that gender budgeting can improve budgeting tout court (see Stotsky 2016 for relevant references).

In broad terms, gender budgeting is a way to commit explicitly a government to “weigh the benefits and costs of policies that would promote gender equality.”75 The goal is to amplify women’s voices in the political discussion and guarantee that fair action is taken in response to such cost-benefit evaluations. This is done in the context of enhancing overall equality rather than disadvantaging boys and men. It is also set to correct any recognized discrimination against the LGBT and other communities. Indeed, the Canadian Government’s Gender Budget Statement introduced in 2017 includes a gender-based analysis that covers factors such as ethnicity, age, income and sexual orientation to be considered in public policy in association with gender.76

However, it is not always obvious how to put these ideas into practice. As Welham (2018) points out, “gender budgeting” could imply that 1) public services programs should be equally accessed by men and women, or 2) that equal amounts of public spending are spent on men and women, or even that public spending should be biased in favor of women and girls. Or perhaps, 3) that it should require the identification of specific ‘women and girls’ spending programs and the allocation of more funding in their favor. This latest option seems the one pursued more often.

Public Financial Management (PFM) procedures can be devised to give due attention to gender issues at each stage of the budget process. They contribute to operationalizing gender-responsive fiscal policies. The first step occurs at the setting of policy goals and targets, then in the actual preparation of the budget law, to be followed up in the control and execution stage, the preparation of the reports, and finally with the independent ex-post audit of the budget.

For example, with the goal of supporting women’s labor participation, a cost benefit analysis of a “universal childcare” option (like in Denmark) could be compared with a “universal child benefit”. Once the choice has been made taking into considerations budget constraints and relative pros and cons, attention to gender issues continues at each step. A “universal child benefit” (like the one in the UK), reaches all households irrespective of their income or employment status. At the policy goal level, several aspects would be considered: 1) it benefits women who, in general, are the primary child caregivers, 2) does not seem to affect labor market participation since it is not based on employment status, but 3) it may incentivize the traditional role of women making it less attractive to look for a job or a more remunerative one. In the preparation of the specific law, attention should be paid in the text, for example, on how “household” is defined, to make sure that single-parent families (predominantly with single mothers) are included without any limitation. At the control stage, what ministry is going to be in charge? The Ministry for Children and Family? The Ministry of Labor? How are the benefits going to be paid? Do all households have access to the payment instruments or are women negatively affected as they may have less access to a bank account (for example)? Are the reports transparent about the portion of eligible households that have been reached? How well-publicized are these reports? Finally, the audit process should point at any irregularities that have impacted single mothers (or women in general).

Various institutions have been designed to support gender-focused PFM. Three countries in particular—Austria, Belgium, and Spain—have introduced many innovations and are of example to the ongoing reforms among the G7. See Table 1 from IMF (2017), page 18.

Table 1.

Survey of PFM Institutions in Advanced Countries

article image
Note: The information has been mostly drawn from surveys prepared by the staff, but also from other information sources (see references).Key: Green = full application of the PFM tool; Yellow = partial application; Pink = limited application; Blank = no information

As observed in other fiscal policy contexts, transparency greatly helps to achieve the targets identified: Australia, Bangladesh, India, South Korea, Morocco, and Nepal issue-specific “gender budgeting statements.” In particular, Korea stands out for collecting gender-disaggregated data and for its thorough assessment of the budget’s gender impact.

Furthermore, civil society involvement is also effective especially among Advanced Economies (AE), for example, the UK Women’s Budget Group and, in Canada, the Alternative Federal Budget.

It is important to stress that civil servants’ capacity is limited in general. According to a recent survey, even Austrian budget staff admitted they did not feel well equipped to conduct gender analysis.77 Investment in this area seems promising: UN Women and the Swedish Development Agency are providing specific technical assistance.

Revenue policies for gender equality

The more recent literature on gender biases focuses on the expenditure side of fiscal policies. However, some explicit discriminations were part of the tax laws of European countries until recently and some implicit ones still exist.78 Clearly, the first step in designing effective reforms is the study of the specific tax code to identify the explicit and implicit biases.

Gender analysis of tax policy

Stotsky (1996) is one of the early studies on this topic. The many examples contained in the paper can be distinguished in explicit and implicit discrimination with direct and potential economic effects. An example of explicit discrimination with only potential/indirect economic adverse consequences is the case of the UK, prior to the 1990 reform: all property income was attributed to the husband if the married couple filed separately.79 In the case of divorce or marriage dissolution, the asset attribution could be contentious. This problem is still relevant for land ownership in Latin America as we will see below.

Examples of explicit discrimination with direct economic consequences include the following: in South Africa until 1995, according to the tax law, a married woman would pay a higher tax rate than a married man. Currently, in Morocco, a man is granted a tax deduction if married with children, but a woman will be given the same deduction only if she can prove to be the children’s legal guardian.

Clearly, correcting these explicit biases is essential, and the obvious starting point. However, most of the problems are less visible and the design of policies or reforms therefore requires a deep knowledge of the specific legal, social, and cultural environment. These considerations will then also inform the appropriate policy response (expenditure, tax, other structural measures) as well as their legal implementation.

As amply documented in previous sections of this paper, women tend to be their household’s secondary earners gaining significantly lower salaries than men. According to the most recent Global Wage Report 2018/201980, the average wage gap is still about 20 percent. This implies that a progressive taxation system translates into a gender bias: the progressivity for a married couple filing jointly translates into higher marginal rates applied to the secondary earner.

However, as noted in Stotsky (2017), a reduction in progressivity (as introduced in the recent US tax reform and suggested in many countries under the banner of “flat tax” as a way to simplify the system), is most likely to translate into an increased gender bias if designed to maintain the same overall revenue flow for the government. Indeed, the less wealthy part of taxpayers—and women earners are mostly in this category—will have to bear a larger portion of the collection. It is, obviously, a political decision on how to “share” the tax burden, but there are various methods to alleviate the progressivity effect on second earners. In particular, in the US and other countries, it is possible for each spouse to file separately hence avoiding the cumulation of income and higher marginal tax brackets. In other cases, a couple filing jointly obtains an automatic standard deduction that is larger than twice the deduction allowed for a single filer.

As for indirect taxes like VAT and excises, there is theoretically no explicit bias. However, different VAT rates on products typically consumed by women may indeed result in biases.81 In some cases, VAT may lead to the home production of certain goods and for this reason, reduce labor supply, particularly of women. As reported also by the OECD, “women in developing countries tend to purchase more goods and services that promote health, education, and nutrition compared to men. This creates the potential for women to bear a larger VAT burden if the VAT system does not provide for exemptions, reduced rates or zero-rating”.82

Enhanced public education on the revenue system

The government can and should play an essential role in disseminating information on revenue policy, on how taxes are calculated and levied. The process may employ different channels to reach men and women: where women represent a large part of the television audience, for example, instructional TV programs are quite effective. In India, the government’s and NGOs’ efforts to educate women are often thwarted by the physical distance83 between the rural areas and the institutions (banks, insurance companies, post offices) that provide the instruction. However, the increased availability of mobile technology is quite promising and should be harnessed to support these initiatives.

Methods for tax collection

Revenue collections procedures can be improved to ensure fair treatment of female taxpayers that often (especially, but not exclusively in developing countries) are harassed by tax collecting agents.

Methods for payments of social transfers

As women tend to be un-banked or under-banked in some parts of the world, it has been shown that social transfer payment procedures that are not based on cash payments—for example based on the mobile network—can have a wider beneficial impact.84

Gender-related public expenditures

Gender-related public expenditure management (GRPEM) is the expression that has obtained wide recognition although the literature uses also the more general “gender-responsive budgeting” (GRB). Following Welham and Ali (2018) these expenditures can be classified as:

Gender-related equal opportunities programs

These programs represent the most explicit gender-related public expenditure and typically focus on: support of mothers’ parental leave,85 subsidized childcare to allow women labor participation, and help for victims of domestic abuse. In addition, they often include campaigns to increase public awareness and change traditional behavior to foster gender equality.

General public services targeted at or mostly used by women

Programs that address public health are sometimes clearly focused on women like those for pregnant women or for the psychological support to new mothers. In other cases, general programs may have a particularly strong impact on women like those focused on education or explicitly directed at the support of female entrepreneurship: the experience with microfinance in South Asia is, of course, emblematic and some studies seem to confirm that micro-finance directed at women entrepreneurs may have positive effects on reducing gender inequality when the cultural environment welcomes (or is not hostile to) a woman active economic role. Hence, according to Zhang and Posso, microfinance in Ghana appears more effective than in Bangladesh.86

“Gender-blind” public services/policies

These represent the largest share of public expenditures and even when considered gender-neutral or “blind”, they may result in maintaining gender inequality or possibly exacerbating it. Gender budgeting insists on the need for a full examination of the effects of these measures.87 An example of these “not-so-blind” policies is evidenced in the OXFAM (2019) briefing note “Gender inequalities and food insecurity” in its analysis of the policies pursued after the food crisis of 2008 in rural Africa. A combination of export bans and investments that “…mostly targeted staple grain productivity, rather than horticulture crops that could boost the livelihoods, food security and nutrition of smallholders, particularly women”88 had the effect of benefiting market-ready farmers, usually men.

Further complexity in low-capacity countries

Although many of the factors affecting the gender gap are common to all countries at every level of development, these become daunting in low-capacity countries. In such contexts, cultural obstacles are coupled with what is perceived as a more stringent use of scarce resources. The literature has identified such factors as limited resources and economic uncertainty, the political economy of public expenditure, and competing budget reform objectives.

The human factor. The number of civil servants and their lack of relevant capability are often mentioned as the main obstacle together with the limited availability of quality data and poor Financial Management Information Systems (FMIS) to manage the complexity of public expenditures. Furthermore, especially in the case of fragile states, economic uncertainty is large, rendering the overall budget process vulnerable to disruptive external shocks.

Political economy struggles. Such challenges naturally emerge especially in the design, preparation, and implementation of the budget. This is all the more relevant where the public sector accounts for a large share of the economic activity of the country, increasing the potential payoff of rent-seeking activities.

The “blanket is too short”. The “absorption capacity”—also in terms of managerial ability—of civil servants and other key local stakeholders is limited. However, if initiatives are supported by donors, the incentives to embark on new projects may be high. Unfortunately, this may result in “reform overload”, turning initially genuine policy intentions to mainstream institutional change into “’tick box’ compliance exercises.”89

The role of the Ministry of Finance has been found to be essential in fostering and promoting GRPEM.90 However, even where the Ministry is genuinely convinced of the importance of the reforms in this area, they may believe that the leading role has to be played by other ministries, or that the time is not “ripe” yet with more pressing objectives to be reached first.

3.2. Structural policies

Structural reforms are particularly difficult to implement as the institutions that they target are often the result of long-standing social norms and cultural traditions. Women have only recently obtained the right to drive in Saudi Arabia and, as of August 2019, a “certificate of virginity” is no longer necessary to obtain a marriage license in Bangladesh.

Consequently, appropriate measures will have to take into consideration the societal fabric status quo. Korpi (2000) identifies three types of welfare state analyzing 18 OECD countries’ “institutional structures of relevance for gender inequality as well as class inequality.” He classifies these different welfare state organizations based on i) general family support,91 ii) dual-earner support, and iii) market-oriented policies.

Legal framework

As already discussed above, some explicit gender discriminations can be addressed by a change in the legislative framework. De facto, the results may not be immediate, but this is a powerful step in triggering a cultural evolution in social norms. The change in legislation is clearly not sufficient as the enforcement of the law may be lacking, but it is certainly a necessary piece in the puzzle. The “Legislation on line” web portal, offers a wealth of law on gender-related issues organized by international organizations and by country.92

The OECD (2019) sponsored SIGI Global Report recommends governments to take action on three dimensions93:

  • i. Translate international conventions into national legal frameworks. This would abolish discriminatory laws, notably on women’s workplace rights and reproductive autonomy.

  • ii. Implement laws more forcefully […], while inviting community leaders and citizens to join in publicly recognizing the discriminatory nature of harmful norms and practices.

  • iii. Report publicly and regularly on progress towards gender equality, even when objectives are not met.

Without implying any direct causation, it nevertheless significant that the analysis of data for 100 countries on women’s property rights and legal capacity over 50 years shows that reforms expanding women’s rights and legal protection were associated with greater female labor force participation, women’s greater movement out of agricultural employment, larger shares of women in wage employment, lower adolescent fertility, lower maternal and infant mortality, and higher education enrollment among girls. Furthermore, such correlation was the strongest for lower-income countries.94 Other country-specific studies, e.g. India, Ethiopia, and China, found that closing gender gaps in rights led to better outcomes for girls and women in other areas of life. These studies do not discuss the impact of legal reforms on norms directly but may well indicate a change in gender norms as well.95 The legal framework interacts with social norms, modifying them, and coding those changes that have occurred already in society: for sure it is not the only driver of changes in social norms. Other factors, such as economic change, demographics, migration, among others, are likely to interplay with changes in rights. A study on laws prohibiting child marriage, suggests that legal reforms will likely bring the most impact if there is widespread awareness of new laws and public confidence in the justice system and enforcement capacity. Education and awareness campaigns as well as sensitization of the population can help legal reform bring more benefits.96

Explicit legal provisions to protect women

There are several macroscopic improvements in the legal provisions that have been recently introduced in many countries and should become pervasive and more stringent for the extremely positive repercussions they appear to have on the gender gap.

Sakhonchik et al (2015) stressed the following aspects in those areas of the world where the following issues are still present:

  • i. Increase in the minimum legal age to marry. The education gap is significantly reduced when the minimum age is at least 18 years of age: secondary enrolment of girls is almost 15 percentage points higher. Furthermore, female employment in relation to population is almost twice as high (at 50 percent).

  • ii. Punish marital rape. Another trace of the English common law, within marriage rape is still not prosecuted among about one-third of Commonwealth countries, and in the UK marriage was legally excluded as a defense to rape only in 1991.

Punish domestic violence. In countries where domestic violence is punished, the women mortality rate is significantly lower and, for children under 5 years of age, the mortality rate is lower than one-half. Increasing women’s outside options, from easier divorce and child support to reducing the gender gap in employment and pay, can have positive repercussions on intimate partner violence. 97

Access to justice for women entrepreneurs in Jordan

Women entrepreneurs in Jordan often lack awareness about their legal rights, how to access legal advice, or the costs and risks involved. According to findings by the European Bank for Reconstruction and Development (EBRD), the International Development Law Organization (IDLO), and the Centre for Women’s Studies at the University of Jordan98, these challenges are exacerbated by a low degree of gender sensitivity among justice actors, leading to unintended biased decisions that can adversely affect women-owned businesses.

Policy responses need to focus on the capacity building of actors across the judiciary system (including judges, prosecutors, mediators, and bar associations) and the development of legal aid on civil and family matters. Furthermore, selection processes within the judicial system need to be transparent and open to all, with a focus on promoting career advancement for women to top-level positions in the sector. Thirdly, the use of mediation in commercial disputes needs to be strengthened and the availability and quality of legal aid services enhanced99. The affordability of legal representation should to be improved and legal awareness training offered to women entrepreneurs. More equitable gender composition of legal professionals is key, requiring the active promotion of legal careers to influence the educational and career choices of women100.

Resources:

https://www.oecd.org/eurasia-week/Promoting-Gender-Equality-Eurasia-Feb2019.pdf

IDLO https://www.idlo.int/sites/default/files/pdfs/news/summary-weatoj-jordan-final.pdf

https://www.idlo.int/sites/default/files/pdfs/publications/report-we_atoj-jordan-final.pdf

Access to Justice

In addition to legal frameworks as such, it is also a lack of access and unequal treatment by the justice system that undermines women’s legal capacities as well as the distribution of resources, especially when economic rights are at stake. The justice system is therefore a vital component of smooth business operations, with implications for enforcing contracts, opening and closing businesses, resolving employment disputes, and upholding the rights of women.

Frameworks for land tenure

A significant gender gap still exists in land tenure especially among emerging markets and developing countries. For example, in several countries the inheritance law ends up favoring male children.101 Deere and Leon (2003) report on the situation in Latin America. The recent introduction of the legal figure of a dual-headed household has much improved the situation derived from the traditional English common law or sometimes from the Napoleonic code— which would assign all non-labor income to the husband as well as the de facto management of the property. In addition, thanks to growing literacy rates, women have become more aware of their rights as widows, or daughters. Also, the introduction of partible inheritance has played a positive role. Furthermore, mandatory joint titling of land for married couples is recommended. However, it is somewhat paradoxical that a reduced gap in land tenure is in large part due to migration (typically of sons) and willingness to remain on the farm and take care of the elderly (by daughters), as well as to the declining economic value and political power associated with land ownership.

Nevertheless, if the path to land ownership through inheritance has improved, the gap tends to persist as “market acquisition” of property is still biased in favor of men. In many countries, it is necessary to introduce pro-active measures to guarantee equal access to financial resources: access to credit is essential especially for poor rural households, typically headed by women.

Labor market policies

Via its consequences for bargaining positions within the family, increasing labor force participation among married women can potentially lead to changes in public policies as well as to a gradual deconstruction of traditional gender roles in the sharing of caring work.102

As highlighted before, a large part of existing gender gaps can be reduced by improving labor market conditions for women. It is necessary not only to guarantee equal access to the labor market but also to obtain equal pay. These goals are complex to attain as both infrastructural conditions and cultural habits create quite difficult hurdles for development.

Labor market conditions that discriminate against women have been under scrutiny for many decades. For example, the “wage gap” was already the focus of the Equal Remuneration Convention promoted by ILO in 1951.103 Not long after that, in 1958, ILO organized a Convention on Discrimination (Employment and Occupation).104

In the last two decades, with the identification of the Millennium Development Goals (MDG) and more recently with the global Sustainable Development Goals (SDG),105 a new impetus has emerged in the fight against both biases and, as reported in Kring (2017), in 2015 the number of countries that formally ratified the former agreement reached 173 while 175 countries ratified the second convention.

The recent global recession and the subsequent recovery have provided further support to the perception that the link between growth and employment has become more tenuous. The consensus is now that policies to promote growth must be explicitly designed to foster employment. An integrated approach to development is necessary and the design of National Employment Policies (NEP) is recommended to make explicit the importance of job creation in the desired economic growth path.

In this context, the ILO Resource Guide on Gender Issues in Employment and Labor Market Policies (2014),106 contains a number of explicit recommendations to overcome the gender disadvantage in the labor force. According to the data, Active Labor Market Policies (ALMPs) have a greater positive effect on women’s employment than on men’s, particularly in contexts where women’s labor force participation is low.107 These policies include support for the unemployed by creating and financing institutions that provide training108 and help with job search, subsidies for taking up jobs, and job-creation initiatives in the local communities. The ALMPs are typically integrated with “passive” labor market policies like unemployment benefits so as to promote re-entry into the labor market, especially for women after interruptions due to childbirth and child-rearing.109 Apart from ALMPs, on the expenditure side, other measures specifically targeted at reducing the labor market participation gap include family benefits, (e.g. paid parental leave), subsidized childcare, subsidies to businesses to encourage the hiring of women.

On the revenue side, typical policies encompass tax benefits to promote the supply of labor, tax reliefs, individual taxation to reduce the tax burden on the second earner, targeted tax relief for single earners. Indeed, as stressed in OECD’s (2012) study on 30 countries over 1980–2007, women’s labor participation is still discouraged by high taxes on the household’s secondary earners.

Another area of focus is the design and introduction of gender-sensitive policies to ensure that men and women are equally able to harness the benefits and opportunities that new technologies, artificial intelligence, and automation can bring – as well as to counteract potential pitfalls and challenges. Flexible and remote working based on enhanced internet connectivity and ICT skills can open up global markets for women across divides of social norms and geography. Job portals and internet platforms can assist in enhancing access to markets for micro-businesses and aid formalization.110 According to some studies, female workers face a higher risk of automation compared to male workers, albeit with significant heterogeneity across sectors and countries. Less well-educated, and older female workers (aged 40 and above), as well as those in low-skill clerical, service, and sales positions are disproportionately exposed to automation. According to the IMF, 180 million jobs that are mostly held by women at present would be at high risk of being displaced globally.111 Policy responses focus on enhanced access to ICT connectivity and skills, a stronger focus on lifelong learning, particularly for lower-skilled women in the workforce, the introduction of regulation of digital jobs platforms, and the integration of women into the design and application of artificial intelligence to avoid the ‘baking in’ of gender bias based on historical data.

Recognize domestic activities as unpaid work

As stressed in the previous sections, the disproportionate share of unpaid work born by women, translates into gender gaps in labor participation, quality of employment and wages, see Ferrant (2014).112 Policies to correct such disparities, apart from their equity-related implications, can provide a direct boost to economic growth.

Reduce the burden of care and domestic work

According to a study by De Henau et al. (2016) for the UK Women’s Budget Group, the impact of investing two percent of GDP in public provision of childcare and elder care services in seven OECD countries would have a significantly larger growth impact than an equally sized investment in construction. For the US, for example, such an investment would create 13 million new jobs most of which would be taken by women; they conclude that “Such a policy would contribute towards creating a more inclusive model of development as well as lifting economies out of recession”.113

Redistribute these tasks more equally between men and women114

Many researchers stress that the suggestion promoted by some115 to compensate all currently unpaid care-related and domestic work may not contribute to the full emancipation of women, but on the contrary, perpetuate their stereotypical cultural role. Furthermore, especially in some economically more developed countries that Korpi (2000) defines as “dual-earner” welfare states, the desire on the part of men to get involved in the care of children and family members is growing. Hence, on the path to gender equality, we will record a progressively more even distribution of these tasks.

From a policy perspective, the measures to encourage such a process exists and have been implemented with various levels of success. These policies move along two parallel routes.

The first one is a substantial investment in household-related infrastructure like day-care facilities and nursing homes for the elderly.116 The second is the provision of tax-funded paid parental leave for fathers. According to ILO data, in 2015, leave entitlements for fathers were provided in at least 94 countries of the 170 covered. To be effective, parental leave needs to be well enough paid, sufficiently long in duration (i.e. somewhat longer period than the current average of 7 days for fathers compared to 106 days for mothers), and non-transferable. This latter aspect is quite important. Indeed, even in Denmark (one of the countries with the highest score in gender equality) “only” 24 percent of fathers take parental leave, which is otherwise transferred, while in Sweden, where paternal leave is “use it or lose it”, 90 percent of fathers use it.

Figure 4.
Figure 4.

Parental leave according to Women Business and the Law database Education, training and skills

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: Women, Business and the Law database.Note: Maternity leave refers to the sum of paid maternity leave and paid parental leave, excluding any paid parental leave specifically reserved for fathers.

Paternity leave refers to the sum of paid paternity leave and any paid parental leave specifically reserved for fathers. Of the economies covered, 184 guarantee at least one day of maternity leave, and 105 guarantee at least one day of paternity leave.

Promoting the accumulation of women’s human capital has been shown to have a positive effect on reducing various gender gaps.117 Legal and financial literacy plays an essential role in reducing asset ownership and wage gaps. In general, budget expenditures in education help reduce the education gap.118

Among ALMPs we mentioned vocational training for women. However, in many cases these initiatives are supply-driven: they focus on activities and sectors that are traditionally female-related. Such training projects tend to reinforce some sort of occupational segregation rather than to contribute to reducing the gender gap. To break occupational segregation, it is necessary to enhance the education for women in subjects where women continue to remain underrepresented, like STEM (science, technology, engineering, and mathematics). This requires a strategy that starts during the pre-kindergarten years and continues throughout primary and secondary education to help adjust social norms that continue to shape educational decisions that girls and young women take.

The cooperation between education authorities and employers is an important way of helping to address this challenge. By providing female role models from industries where women are underrepresented, improving the quality and relevance of career advice and guidance, as well as introducing better work-based learning models (such as apprenticeships, traineeships or similar) to smooth school to work transition, especially in STEM areas, such public-private sector partnerships can play a critical role.

Financial inclusion

Achieving gender equality in financial inclusion is an important way to unlock resources for economic empowerment and growth, by enhancing access to economic opportunity for a wide segment of society. It is also important at the micro-level, as it improves women’s lives by giving them a voice and improving their decision-making capabilities. Studies suggest that women are more likely to be excluded from the formal financial sector in countries where: laws and norms discriminate against women; women have lower participation in the labor market; collateral and bankruptcy laws that protect the rights of borrowers and lenders are weaker; and where state-owned banks have a bigger share in the banking system119. State ownership in the banking sector seems to provide fewer opportunities for women to use banking services for different purposes due to lower incentives for state-owned banks to diversify their portfolio of clients and increase their outreach to include women and other groups that may be perceived as riskier or less creditworthy. Governments should pay more attention to monitoring and influencing state-owned bank behavior to ensure equal access for women to their financial services.

Case study: Enhancing the employment of women in Central Asia

In Kazakhstan, the Commission for Families, Demographics, and Gender, the Ministries for Labor and Education established close cooperation with the private sector via the Foreign Investment Council to (i) introduce better career guidance and progression routes from STEM education / vocational training into jobs for women and young people, specifically in the Power & Energy and Natural Resources Sectors where women continue to be underrepresented in technical and higher-paid roles, (ii) to enhance national-level skills standards so that they reflect the needs of employers, and (iii) to remove labor market restrictions that currently bar women from performing a wide range of (largely technical) roles.

In 2018, a reform of the Kazakh Labor Code removed 96 types of work from a list of 287 jobs that women are barred from accessing due to perceived adverse working conditions and the performance of hard physical work.

Health

Prescribed policies to improve gender disparities in health outcomes will need to respond to specific challenges of countries and regions at different levels of development. In low-income countries and emerging market economies, better provision of basic public infrastructures such as clean water and sanitation, access to health services to prevent maternal mortality, and fight against HIV/AIDS will be key to help reduce excess girls and female mortality. Furthermore, strengthening social protection related to the provision of long-term care and better support for informal caregivers can help mitigate health disadvantages between men and women stemming from caring for elderly and sick members of the family by women.

In countries and regions where sex-selective abortions and preference for sons over daughters drive gender disadvantage for children already born, changes to informal institutions and household behavior are key to resolving this problem. The case of South Korea throws light on the role of public policy in affecting gender inequality. A patriarchal tradition compounded with an authoritarian regime (after the Korean war of the early 50s) pursuing an accelerated economic development path initially increased in the sex ratio.120 Only more recently, thanks to urbanization121, a higher level of education for women, and higher labor participation, has gender equality recorded very significant improvements.122 Other public policies such as campaigns aimed at changing people’s perception about the role of daughters and sons, legislation to enhance gender equity in domestic and public life seem to accelerate the diffusion of new values and change social norms.

Child marriages that disproportionately affect girls are still pervasive: even where the minimum age has been increased to 18 years old, exemptions exist and, with parental (Bangladesh among others) or judicial (in Paraguay for example) consent, marriages can be contracted much earlier. Roots of the practice vary across countries – poverty, lack of educational opportunities, and poor access to health services make it difficult to eradicate. Here, too, proactive measures to changing norms and stereotypes around gender roles at the national and community levels are deemed necessary.

Similarly, proactive measures should be implemented to educate in the use of (and guarantee easy access to) cheap and effective contraception. According to the UN in 2019, about 50 percent of women around the world (married or in a union) could make their own decision about contraception. This figure is particularly low in Western Africa countries (less than 30 percent).123 Figure 5 demonstrates contraceptive prevalence across the world: around 60 percent of married and in-union women in high-income countries used modern methods of contraception, while only 25 percent did so in low-income countries. The SDGs aim to meet 75 percent of the global demand for contraception by 2030. Various factors and policies will be important to achieve this objective, including social and behavior change, investment in family planning commodities and services, expanding the choice of contraceptive methods among others.124 Studies about the medium-term implications for women’s welfare of access to contraception are limited. However, Bailey et al. (2012), records that when in the 60s in the US independent access (i.e. without the consent of a guardian) to contraception was given to women at 18 (rather than 21), both participation and wage gaps decreased significantly, even after controlling for other factors like civil rights movement, technological progress etc.

Figure 5.
Figure 5.

Contraceptive prevalence

(in percent)

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: United Nations, Department of Economic and Social Affairs, Population Division (2020). World Contraceptive Use 2020 (POP/DB/CP/Rev2020), authors’ calculationsNote: Average prevalence across regions.

Practice shows that often health plans are gender blind and do not recognize the different needs of men and women. Even at the pharmacological level, it is significant that many drugs are tested and deemed effective in clinical tests that often do not include women. To address this issues, it is important to design laws that will allow the use of new drugs and proceedures that have met clinical standards in trials that include an appropriate number of men and women. The WHO (2006) report on work-related health issues is an important source of information and policy recommendations. Starting from the factual physical differences between the average man and woman, it is not surprising that women working with tools and in spaces that were designed for men face work-related fatigue, repetitive strain injury, infections, and mental health problems more often than their male colleagues. In this case, national ergonomics standards should be introduced to guarantee that new machinery is designed and adjustable to meet male and female body characteristics.

Gender is also often an ignored factor during health emergencies. However, recognizing the extent to which disease outbreaks affect women and men differently is a fundamental step to understanding the primary and secondary effects of a health emergency on different individuals and communities, and for creating effective, equitable policies and interventions.125

Gender-sensitive crisis response policies

Policies and public health efforts to pandemics rarely address the gendered impacts of disease outbreaks. However, gender influences both patterns of exposure to and the treatment of infectious disease. For example, gender roles often determine where and how men and women come into contact with infectious agents. Differences in the provision of health care as well as scientific knowledge about the effects of treatments on men and women shape the course and outcomes for those infected.129

In most societies, women are more likely than men to be caregivers for the sick at home and as part of the health care system. In addition, women tend to be front-line professionals such as nurses, teachers, childcare workers, aged-care workers, and cleaners, and perform a wide range of unpaid care responsibilities. Women are more likely than men to be casual workers without entitlement to sick leave or self-isolation, together with a greater risk of wage loss, unemployment, and limited access to healthcare and protective items. The research found that women’s jobs are 1.8 times more vulnerable to the Covid-19 crisis than men’s jobs: whilst women make up 39 percent of global employment, they accounted for an overall 54 percent of job losses during the early months of the crisis (as of May 2020).126 One of the main reasons for that is that women are disproportionately represented in industries that are hardest hit by the crisis. In addition, the volume of unpaid work carried out by women tends to increase significantly during crises and is often moved from the paid economy (schools, nurseries, elderly care) into the unpaid one. With this additional workload, there is an increased risk of domestic violence,127 especially in cases where men face elevated stress from job or income loss.128 School closures also tend to increase dropout rates among girls and particularly affect single parents, 90 percent of whom are women worldwide.129

Some evidence from previous pandemics such as Zika and Ebola also shows that women were less likely than men to have power in decision making around the outbreak, and their needs were largely unmet. For example, resources for reproductive and sexual health were diverted to the emergency response, contributing to a rise in maternal mortality in a region with one of the highest rates in the world.130

Effective gender-sensitive responses should therefore include a focus on collecting and analyzing gender- and age-disaggregated data in all surveillance and monitoring efforts, gender-sensitive health care and labor market policies, dedicated support to women entrepreneurs, as well as specific measures to counteract gender-based violence and harassment.

Additional resources:

McKinsey Global Institute (2020) COVID-19 and gender equality: Countering the regressive effects. July 15, 2020.

Wenham, C., Smith J., Morgan R., (2020) Covid-19: the gendered impacts of the outbreak. The Lancet, 6 March. https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30526-2/fulltext#%20

UNFPA (2020) Technical Brief: Protecting Sexual and Reproductive Health and Rights, and Promote Gender Equality. https://www.unfpa.org/sites/default/files/resource-pdf/COVID-19_A_Gender_Lens_Guidance_Note.pdf World Health Organisation (2007) Addressing sex and gender in epidemic-prone infectious diseases. https://apps.who.int/iris/bitstream/handle/10665/311322/9789241515467-eng.pdf?ua=1

Interagency Standing Committee (2014) Humanitarian Crisis in West Africa (Ebola) Gender Alert. HUMANITARIAN CRISIS IN WEST AFRICA (EBOLA) GENDER ALERT: Sept 2014 https://www.globalhealth.org/wp-content/uploads/IASC-Gender-Reference-Group-Gender-Alert-WEST-AFRICA-EBOLA-19-Sept-2014.pdf

Subrahmanyam, G. (2016) Gender perspectives on causes and effects of school dropouts. SIDA http://www.ungei.org/Final_Paper_on_Gender_perspectives_C2.pdf

Aid in education and health

Strategies to improve education and health cannot abstract from the necessary infrastructure to allow girls fully to take advantage of the options that are potentially made available. Especially in developing countries, this effort must take into consideration the social role of women as caregiver and provide the appropriate support with “scheduling times for training; provision of transport or grants/subsidies; and additional basic skills where necessary (e.g. literacy and numeracy training)”.131 ILO’s sponsored programs like the Training for Rural Economic Empowerment (TREE) in Pakistan or the Technical and Vocational Training (TVET) project in Bangladesh promoted demand-driven skills as inferred through an assessment of the labor market demand and by introducing stronger links with the private sector (ILO 2014c).

Culture of gender inequality and implicit bias (eradication of stereotypes)

The eradication of stereotypes that perpetuates a gender cultural bias is the ultimate goal and certainly cannot be attained in the very short term. It requires a conscious effort in education from a very early age with personnel (early childhood educators) that are well trained. Simultaneously, other ways to affect traditional perceptions towards gender have emerged and should be employed. We already mentioned the role that changes in the legal framework can have, but more recently the television and specific programs of entertainment have emerged as a potent tool of gender equality. In addition, imposed quotas in leadership positions have been introduced and their effects studied in various contexts.

Indeed, television has proven to be a strong advocate against gender bias and the ingrained stereotypical perception of women. Very significant are the results reported—among numerous studies of this type—in Jensen and Oster (2009) about the Southern State of Tamil Nadu in India and La Ferrara, et al (2012) in Brazil. According to surveys’ results in rural areas of Tamil Nadu, cable TV diffusion, by providing contacts with the outside world and different examples of family relations and women’s role in the household has led to a significant decrease in fertility, more autonomy of mobility, and higher school enrolment. Furthermore, households owning a connected TV set are less likely to accept domestic violence as “normal” and express a less pronounced preference for sons. The response of the state government to the initial findings was that of distributing free TV sets to hundreds of households.

Similarly, in rural areas of Brazil, the impact of telenovelas typically telling stories of small families has led to a drop in fertility rates where fewer newborns are named after the telenovelas’ protagonists.

The analysis of the effect of quotas on social norms is more complicated and debatable. Many countries have used quota systems to increase the number of women in political and corporate leadership.132

Political quota systems can be mandated by the constitution and/or electoral law or introduced on a voluntary party basis. For example, as a result of affirmative action, quotas have been introduced in all Andean countries at the congressional and municipal levels.133

Furthermore, in some selected municipalities training in the budget analysis is provided to the local officials and others elected in other places through quotas “to raise their own profile and present their own proposals and gives them inputs for undertaking similar reviews themselves”134 Figure 6 shows countries that have adopted legislative quotas.

Figure 6.
Figure 6.

Gender quotas in parliaments

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: International IDEA https://www.idea.int/data-tools/data/gender-quotas

Starting from the obvious argument that women have the right to be represented and treated equally, quotas proved to be a relatively efficient tool to increase gender diversity in parliaments and on company boards. Furthermore, gender diversity, it is argued, will increase the talent pool and improve the quality of decision-making both in politics and in the corporate world. Last, but not least, women leaders can be role models and help change traditional expectations about gender roles and stereotypes. This point is also supported by some social/anthropological studies.

Using data from artefactual field experiments and surveys conducted in 61 villages in India, Gangadarhan et al (2016) find that in the short run, there is a backlash against women in leadership positions from men that initially see this as a “transgression of social norms.” However, in time, they abandon such a behavior tending to sabotage women’s leadership and these roles are internalized as “normal”. Hence, the conclusion seems to be that quotas can have a positive education effect despite the initial frictions. Similar conclusions are reached by Beaman et al. (2009). After ten years of quotas, women are more likely to participate and win elected positions when quotas are lifted: “Prior exposure to a female chief councilor improves perceptions of female leader effectiveness and weakens stereotypes about gender roles in the public and domestic sphere.”

However, women sometimes express their opposition to the idea of quotas as they expect their leadership position (political or economic) to be accepted because of recognized talent, skills, and competence rather than the result of a kind concession. This attitude has been recorded especially in advanced economies.

Corporate gender quotas

According to a report by Deloitte, only 17 percent of corporate board seats globally are held by women135. To increase female representation on boards, countries have used mandatory or voluntary systems of quotas. A widely cited example is Norway, a country that has mandated listed companies to reserve at least 40 percent of board seats for women since 2007.136 Many other countries in Europe followed: Belgium, France, and Italy with an obligation under the threat of penalties and Germany, Spain, and the Netherlands with no sanctions.137

These policies proved potent in making boards more gender diverse (Figure 7). For example, in Norway, the share of women on company boards increased from 20 percent in 2003 to over 40 percent in 2008. At the same time, the introduction of quotas was not welcome by everyone. Criticism included issues like the lack of experienced women, “tokenism”, or a mainly symbolic practice to fulfill obligations, rather than a true effort, and more pressures on “golden skirts”, that is on a small number of highly qualified women stretched across many boards.

Figure 7.
Figure 7.

Change in women’s representation on company boards (in percent)

Citation: IMF Working Papers 2021, 059; 10.5089/9781513571164.001.A001

Source: European Institute for Gender Equality

For the moment, evidence has been inconclusive on whether more women on boards improved companies’ financial performance and influenced decisions made.138 Furthermore, so far quotas have not led to more women in senior and managerial positions or among top executives, i.e. those who would make a pipeline to take board seats. Globally, less than five percent of company CEOs are women.139 The experience shows, quotas on their own will not remove all the barriers but may compensate for those that prevent women from advancing in their careers or becoming political leaders.

Summary

This is a summary of policies that were shown to have a positive impact in reducing various gender gaps. The interactions among these measures are obvious. Most them, for example, will have a fiscal repercussion and some of them require action in several spheres simultaneously like the digital challenge.

Legal Framework

  • eliminate discriminatory laws

    • civil rights (domestic violence, child marriage)

    • property rights (disjoint ownership and equal inheritance rights)

    • access to education

  • design laws to define the digital worker’s rights

Education campaign

  • introduce quotas (political and corporate)

  • anti discriminatory education: information campaigns against stereotypes, television programs with educational and entertaining contents against stereotypes

  • provide access to contraception and educate for its use

Labor Market

  • subscribe to ILO conventions

  • organize active LP

    • retraining programs especially after child birth and rearing

    • financial and digital literacy

  • provide “long” paid and non transferable parental leave to fathers

Fiscal

  • review and amend tax code

    • delete explicit discriminatory taxes and address implicit discriminatory taxes through appropriate fiscal policy or other structural responses,

    • eliminate negative effect of progressivity for secondary earmers

  • introduce gender budgeting

  • set up gender-responsive expenditures

    • invest in child and elder care

    • incentives for women in STEM

  • invest in digital infrastructure and render it accessible to tele-workers

Financial

  • provide incentives to banks to promote financial access for women

  • develop wireless payment systems

V. Suggested Research Topics

The ground covered in the previous sections suggests several aspects that call for further analysis either because the information is missing, or the evidence is inconclusive. This is a list of the most pressing issues raised above.

  • a. A wealth of policies has been implemented to address gender inequality in its various dimensions. For example, legislated quotas in political and business higher echelons. Apart from some field studies, empirical analysis of the macroeconomic impact of these measures is still poor.

  • b. Numerous studies have pointed at the benefits of transparency to foster policymakers’ accountability. Although several NGOs around the world promote and defend gender equality in the budgetary process, a rigorous analysis of the impact on the quality and results of the process in countries where such NGOs are operating is still missing.

  • c. Recent studies have shown that Artificial Intelligence is biased against minorities and women because of the sample sets used to train the systems. What is the current cost suffered by women in terms of failed employment applications and denied credit access? And what would need to be done to address this problem?

  • d. Women’s presence in the “essential sectors” is very significant. The impact of the COVID-19 pandemic is ambiguous: essential workers did not suffer from lay off (or furlough), but were more exposed to the virus. What is the welfare net effect?

  • e. What kind of interventions help reduce intimate partner violence? Much better data collection needs to be done to know the fundamental statistics. These are often not collected, itself an important form of gender bias.

  • f. What are the pros and cons of mandatory labor income transparency?

  • g. What measures other than incentivized paternity leave can help make the father an equal partner in the household?

  • h. There is a growing proportion of single mothers. How do policies need to be redesigned in order to align more with single mothers’ needs? i. What are the most effective ways to change cultural norms that are gender biased? How do they depend on the arena (e.g. child marriage, STEM representation, political aspirations)?

VI. Concluding Remarks

Countries around the globe have made considerable progress in narrowing gender gaps in many areas of life. Female labor force participation and employment have increased and the wage gap relative to men has narrowed practically across all countries. This important change reflects many factors, including achievements in education and a growing proportion of women who join and stay in the labor market while combining their work with raising children.

Despite this progress, gender gaps still persist. Gender disadvantages vary across countries, areas, and age profiles. While lower-income countries are still struggling in achieving gender parity in educational attainment and experience excess female mortality, countries across all regions of the world experience slow progress in bringing more women into the labor force, and face persistent gender earnings gaps and stubbornly high barriers for female career progression and political empowerment. Certain policies or lack of appropriate support for families and working mothers, social norms and informal institutions, and legal barriers are among the factors exacerbating gender disadvantages.

Governments must step up their effort in achieving gender equality through policies such as removing gender-based legal restrictions, introducing gender-responsive budgeting, revising tax policies and creating space for priority spending, supporting families, and making finance accessible for women. Public intervention and campaigns aimed at changing people’s perceptions (informal institutions and social norms) can be instrumental in eliminating gender stereotypes that are often at the core of persisting gender disparities. Empowering women through their increased participation in government and corporate decision making will inform societies about women’s experiences and the challenges they face. Resolving problems of today – inequality and poverty, climate change, and health emergencies among others – will not be possible without taking on board women’s perspectives and gender equality.

Gender Equality and Inclusive Growth
Author: Raquel Fernández, Asel Isakova, Francesco Luna, and Barbara Rambousek